Act quickly, cut spending, raise taxes on rich to avoid fiscal cliff
The Kansas City Star
The nation’s political leaders will spend December trying to stave off the deep, automatic cuts that will go into effect at the end of the year. Congress must find better ways to rein in runaway deficit spending.
It’s a contentious process, with politicians clinging to ideology, and interest groups lining up to protect their share.
As the edge of the so-called fiscal cliff moves closer, we offer 10 thoughts:
- A deal must be forged, and quickly.
If nothing happens from now through the first half of 2013, the budget deficit would actually fall too fast, shrinking spending and forcing the United States back into recession. Without action, about $500 billion in tax increases and $200 billion in spending cuts begin to kick in with the new year.
But it’s not instant economic disaster. There is still time in early 2013 to find reasonable compromises, and this means the “cliff” is more accurately a “slope.”
While the deficit is a serious problem and must be reduced over time, the nation’s greatest short-term need is for jobs and continuing economic growth. Any compromise must keep those goals primary.
Public disenchantment with Congress and partisan gridlock is a good prod for a compromise sooner, not later. It would help begin to repair faith among constituents.
President Barack Obama won re-election with the clearly stated position of raising tax rates on the wealthiest and protecting the middle class. He argues correctly that it will take both spending cuts and tax increases on the wealthy to safely improve the nation’s economy.
Obama needs to pull out all the stops to convince Congress to invest some of the new tax revenue in education and infrastructure.
Too much of a delay in finding compromise plays into the hands of the Super PACs and other monied special interest groups with the means to muddy the waters with misleading ad campaigns and other pressure tactics. The just-completed election cycle saw enough of that; the nation doesn’t need more mudslinging and manipulation so soon after Nov. 6.
Part of any fix must involve limiting tax deductions and closing loopholes, proposals that appeal to both parties. That’s firm common ground.
Grover Norquist’s “no new taxes” mantra must be silenced. National public opinion polls, the election outcomes and even a few free-thinking Republicans are sounding the death knell on this obstructionist plank. It can’t happen soon enough.
Returning taxes on the wealthiest to Clinton-era rates makes the most sense. Businesses did quite nicely during that time, and it would still be far below previous decades’ taxation levels. Raising tax rates on the wealthiest would have a minimal risk for the economy and would begin to resolve some serious inequities.
While the nation yearns for fiscal compromise, let the discussions begin on controlling health care cost increases in Medicare and Medicaid as well as reforming Social Security.
While members of Congress likely won’t have everything wrapped up by Christmas, it’s important that they have a gift card ready that promises more serious changes early next year.